BRASILIA, June 19 (Reuters) - Brazil will pay small farmers
to plant trees in deforested Amazon areas to slow rain forest
degradation, President Luiz Inacio Lula da Silva said on Friday
as he unveiled a broad plan to protect the region.

The effort may help stave off growing international
pressure on Brazil to reduce deforestation that scientists say
spurs global warming, providing alternative livelihoods to poor
Amazon dwellers who live off timber exploitation.

"We need to think about how to make those people feel that
they will make more money by planting trees than by cutting
them down," Lula said in an interview after a ceremony to
inaugurate the "Green Arch" program to protect the Amazon.

"The small (agricultural) producers that plant trees in
areas that were degraded, we're going to pay them $51 per
month." He did not offer further details on the program.

The proposal appears similar to schemes proposed by global
conservation groups that Brazil has largely resisted that would
pay rain forest residents to prevent deforestation that causes
20 percent of global greenhouse gas emissions.

Known as Reduced Emissions from Deforestation and
Degradation, or REDD, such projects allow wealthy nations to
reduce the cost of emissions reduction by paying to keep
forests standing in poorer nations.

Lula, who has been criticized by environmentalists for
putting development ahead of conservation, said Amazon
residents had to change their old habits of deforestation due
to mounting pressure from international markets.

"We have to say to people that there was a moment when we
could deforest, but that it works against us now. It will hurt
us in the future because international loans won't come," Lula
said.

The Green Arch initiative launched on Friday boosts
coordination between government agencies to prevent illegal
logging and trains some 300 officials to prevent land-grabbing
in municipalities with the highest levels of deforestation.

The effort follows growing awareness within Brazil about
the problem. Top retail groups last week banned the purchase of
beef coming from deforested areas after a report showed the
beef industry was the largest driver of Amazon deforestation.

Brazil last year presented a plan to slash Amazon
deforestation in half over 10 years and thereby avoid the
release of 4.8 billion tonnes of carbon dioxide into the
atmosphere -- an about-face after years of opposing setting
targets.

CONTROVERSIAL LAW

Lula's government is focused largely on a proposed law to
regularize Amazon land ownership that he calls a "small
revolution" but that environmentalist and conservation groups
charge will generate a new wave of land-grabbing.

The controversial bill would give 1.2 million people and
numerous companies titles to a huge chunk of the sensitive
environment to bring order to decades of chaotic land use and
make policies easier to implement.

"We want to be reasonable so that no one can accuse Brazil
of anything. That is why we are going to regulate," Lula said
in a speech in the Amazon frontier town of Alta Floresta in
Mato Grosso state.

He was flanked by Mato Grosso Governor Blairo Maggi, known
as the "Soy King," who has drawn fierce criticism from
environmentalists for heavy deforestation in the state.

Over three decades, settlers, farmers and speculators have
occupied, stolen and sold state land they did not legally own,
fueling the destruction of about a fifth of the world's largest
rain forest. Land titles are often nonexistent or fake.

The government says the new bill will benefit impoverished
peasants encouraged to settle the Amazon during the 1964-85
military dictatorship but never provided with legal support,
public security or financial aid.

Conservationists are particularly outraged that the Senate,
under pressure from the powerful farm lobby, included companies
and large farmers as beneficiaries. The bill grants them
special preferences, such as not having to occupy the land
themselves and being able to claim several properties.
(Editing by Peter Cooney)

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